This study focuses on two supply chains for mahogany that originate in remote biodiversity-rich forests in Honduras. These supply chains were selected because they involve small forest community cooperatives that, compared with industrial operations, have a lower capacity to respond to market requirements for legal wood, including the U.S. Lacey Act.
The study describes two approaches used to minimize the risk of sourcing illegal wood. The first approach was to establish strong relationships with the suppliers and the second was to prefer certified wood. The main lessons from this study are:
- The Lacey Act requirements had little or no impact on the way the buyers managed risk for these specific supply chains, because the buyers established supply chain control systems prior to 2008 to (a) secure a long-term supply of the product, and (b) implement corporate environmental/ social responsibility policies.
- Supply-chain control systems, such as barcode tracking and chain-of-custody certification, are useful tools for enhancing assurances of legality. Long-term relationships with suppliers and commitments from buyers have been important for the successful implementation of these approaches, and critical to minimizing the risk of illegal wood.
- Intermediaries and facilitators play a key role in building and strengthening the technical and administrative capacity of the cooperatives to harvest and process timber.
- The community cooperatives in these supply chains face various challenges: inadequate law enforcement, competing land-use pressures, drug trafficking, and competition with illegal logging. Yet the sustained demand for high-value species such as mahogany provides a powerful incentive to maintain and strengthen forest community operations.
- The supply-chain control approaches highlighted in this study work, in part, because of the high value of the end product, and, because of the financial assistance of external donors that have invested in building the technical capacity and social development of the community cooperatives. In-depth analysis to understand the financial viability of the operations without such support is needed.
- Although the long-term financial sustainability of the community cooperatives is unclear, the perceived community and biodiversity benefits, along with the buyers’ interest in securing a long-term supply of legal wood, are strong incentives for all stakeholders to ensure their continued viability.
This issue brief is based on a review of relevant documents, visits to the field sites and processing facilities, and a series of interviews with stakeholders. A complementary video is available at the Forest Legality Alliance website.